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Gazetted:Friday 5th January, 2007 (General Notice 6/2007).
Commencement:Friday 5th January, 2007.
finance (n0. 2) ACT, 2006
______
arrangement of sections
part i
Preliminary
Section
1.Short title and interpretation.
part ii
Income Tax
Amendments to Chapter I of Finance Act [Chapter 23:04]
2.Amendment of section 14 of Cap. 23:04.
3.Amendment of section 22B of Cap. 23:04.
4.Amendment of section 22C of Cap. 23:04.
5.Amendment of section 22E of Cap. 23:04.
6.Amendment of section 22H of Cap. 23:04.
7.New section inserted in Cap. 23:04.
8.Amendment of Schedule to Chapter I of Cap. 23:04.
Amendments to Income Tax Act [Chapter 23:06]
9.Amendment of section 2 of Cap. 23:06.
10.Amendment of section 7 of Cap. 23:06.
11.Amendment of section 8 of Cap. 23:06.
12.Amendment of section 15 of Cap. 23:06.
13.New section inserted in Cap. 23:06.
14.Amendment of section 37 of Cap. 23:06.
15.New sections inserted in Cap. 23:06.
16.Amendment of section 64 of Cap. 23:06.
17.Amendment of section 72 of Cap. 23:06.
18.Amendment of section 80 to Cap. 23:06.
19.New Part inserted in Cap. 23:06.
20.Amendment of section 90 to Cap. 23:06.
21.New section inserted after section 97B of Cap. 23:06.
22.Amendment of Third Schedule to Cap. 23:06.
23.Amendment of Fourth Schedule to Cap. 23:06.
24.Amendment of Fifth Schedule to Cap. 23:06.
25.Amendment of Sixth Schedule to Cap. 23:06.
26.Amendment of Eleventh Schedule to Cap. 23:06.
27.Amendment of Fifteenth Schedule to Cap. 23:06.
28.Amendment of Sixteenth Schedule to Cap. 23:06.
29.Amendment of Seventeenth Schedule to Cap. 23:06.
30.Amendment of Eighteenth Schedule to Cap. 23:06.
31.Amendment of Nineteenth Schedule to Cap. 23:06.
32.Amendment of Twenty-First Schedule to Cap. 23:06.
33.New Schedule inserted in Cap. 23:06.
part iII
Stamp Duties
34.Amendment of Schedule to Chapter II of Cap. 23:09.
part iV
Estate Duty
35.Amendment of Schedule to Chapter II of Cap. 23:04.
part V
Capital Gains Tax
36.Amendment of section 11 of Cap. 23:01.
37.Amendment of section 21 of Cap. 23:01.
38.Amendment of section 23 of Cap. 23:01.
part vI
Value Added Tax
39.Amendment of section 2 of Schedule of Cap. 23:12..
40.Amendment of section 28 of Cap. 23:12.
41.Amendment of section 32 of Cap. 23:12.
42.New Schedule inserted in Cap. 23:12.
part vII
Customs and Excise
43.New Part inserted in Cap. 23:02.
44. Amendment of section 182 of Cap. 23:02.
part ViII
Amendment of Other Acts and Savings
45.Amendment of Cap. 21:03
46.Amendment of Cap. 21:05
47.Amendment of Cap. 24:09
48.Amendment of Cap. 24:24
49.Amendment of Act No. 6 of 2006.
50.References to old currency system in enactments.
51.Saving of powers exercised under SI 199 of 2006.
ACT
To make further provision for the revenues and public funds of Zimbabwe and to provide for matters connected therewith or incidental thereto.
ENACTED by the President and Parliament of Zimbabwe.
PART I
Preliminary
1Short title and interpretation
(1)This Act may be cited as the Finance (No. 2) Act, 2006.
(2)For the avoidance of doubt it is declared that amounts which are expressed in terms of the old currency system in any enactment referred to in this Act are re-denominated in this Act in accordance with the new currency system.
In this subsection “new currency system” and “old currency system” have the meanings given to those terms in section 2(1) of Statutory Instrument 199 of 2006.
part ii
Income Tax
Amendments to Chapter I of Finance Act [Chapter 23:04]
2Amendment of section 14 of Cap. 23:04
With effect from the year of assessment beginning on the 1st January, 2007, section 14 (“Income tax for periods of assessment after 1.4.88”) of the Finance Act [Chapter 23:04] is amended in subsection (2)—
(a)by the deletion of “1st January, 2006,” and the substitution of “1st January, 2007,”;
(b)by the repeal of paragraph (a) and the substitution of—
“(a)in the case of a person other than a company, a trust or a pension fund, at the specified percentage of each dollar of each of the following parts of his taxable income from employment—
(i)so much as does not exceed one million two hundred thousand dollars;
(ii)so much as exceeds one million two hundred thousand dollars but does not exceed two million four hundred thousand dollars;
(iii)so much as exceeds two million four hundred thousand dollars but does not exceed three million six hundred thousand dollars;
(iv)so much as exceeds three million six hundred thousand dollars but does not exceed twelve million dollars;
(v)so much as exceeds twelve million dollars but does not exceed thirty-six million dollars;
(vi)so much as exceeds thirty-six million dollars but does not exceed sixty million dollars;
(vii)so much as exceeds sixty million dollars;”.
3Amendment of section 22B of Cap. 23:04
With effect from the 1st January, 2007, section 22B (“Automated financial transactions tax”) of the Finance Act [Chapter 23:04] is amended by the deletion of “ten dollars” and the substitution of “fifty dollars”.
4Amendment of section 22C of Cap. 23:04
With effect from the year of assessment beginning on the 1st January, 2007, section 22C (“Presumptive tax”) of the Finance Act [Chapter 23:04] is amended by the repeal of paragraphs (c) to (i) and the substitution of—
“(c)operators of taxicabs for the carriage of passengers for hire or reward having seating accommodation for not more than seven passengers, ninety thousand dollars per quarter year for each such taxicab so operated; or
(d)operators of omnibuses for the carriage of passengers for hire or reward having seating accommodation for not less than eight or more than fourteen passengers, ninety thousand dollars per quarter year for each such omnibus so operated; or
(e)operators of omnibuses for the carriage of passengers for hire or reward having seating accommodation for not less than fifteen or more than twenty-four passengers, ninety thousand dollars per quarter year for each such omnibus so operated; or
(f)operators of omnibuses for the carriage of passengers for hire or reward having seating accommodation for not less than twenty-five or more than thirty-six passengers, one hundred and eighty thousand dollars per quarter year for each such omnibus so operated; or
(g)operators of omnibuses for the carriage of passengers for hire or reward having seating accommodation for not less than thirty-seven passengers, one hundred and eighty thousand dollars per quarter year for each such omnibus so operated.
(h)operators of goods vehicles having a carrying capacity—
(i)of more than ten tonnes but less than twenty tonnes one hundred and eighty thousand dollars per quarter year;
(ii)of ten tonnes or less but which is driving one or more trailers resulting in a combined carrying capacity of more than fifteen tonnes but less than twenty tonnes, one hundred and eighty thousand dollars per quarter year;
(iii)of twenty tonnes or more, three hundred thousand dollars per quarter year;
(i)operators of driving schools providing driving tuition—
(i)for class 4 vehicles only, one hundred and twenty thousand dollars per quarter year;
(ii)for class 1 and 2 vehicles (whether or not in addition to providing driving tuition for other classes of vehicles), one hundred and eighty thousand dollars per quarter year.”.
5Amendment of section 22E of Cap. 23:04
Section 22E (“Carbon tax”) (1) of the Finance Act [Chapter 23:04] is amended with effect from the 1st January, 2007, by the deletion of “five dollars per litre” and the substitution of “one hundred dollars per litre”;
6Amendment of section 22H of Cap. 23:04
With effect from the 1st January, 2007, section 22H (“NOCZIM debt redemption levy”) of the Finance Act [Chapter 23:04] is amended by the deletion of “twenty-five dollars per litre” and the substitution of “sixty dollars per litre”.
7New section inserted in Cap. 23:04
With effect from the year of assessment beginning on the 1st January, 2007, Part III of Chapter I of the Finance Act [Chapter23:04] is amended by the insertion after section 22H of the following section–
"22JTax on non-executive directors' fees
The tax on non-executive directors' fees chargeable in terms of section 36J of the Taxes Act shall be calculated at the rate of twenty per centum of each dollar of the fees from which such tax is to be paid in terms of the Thirty-Third Schedule to that Act.".
8Amendment of Schedule to Chapter I of Cap. 23:04
With effect from the year of assessment beginning on the 1st January, 2007, the Schedule (“Credits and Rates of Income Tax”) to Chapter I of the Finance Act [Chapter 23:04] is amended—
(a)by the repeal of Part I and the substitution of—
“PART I
Credits
Section /Nature of credit / Specified
amount
$
10 / Credit for taxpayers over 59 years of age ...... / 120000
11 / Blind persons credit ...... / 120000
13 / Mentally or physically disabled persons credit ...... / 120000”;
(b)in Part II by the deletion of the items relating to the level of taxable income and the substitution of—
“Section /Level of taxable income / Specified
percentage
%
14(2)(a)(i) / Up to $1200000 ...... / 0
14(2)(a)(ii) / $1200001 to $2400000 ...... / 25
14(2)(a)(iii) / $2400001 to $3600000 ...... / 30
14(2)(a)(iv) / $3600001 to $12000000 ...... / 35
14(2)(a)(v) / $12000001 to $36000000...... / 40
14(2)(a)(vi) / $36000001 to 60000000...... / 45
14(2)(a)(vii) / $60000001 and above...... / 47,5”.
Amendments to Income Tax Act [Chapter 23:06]
9Amendment of section 2 of Cap. 23:06
With effect from the year of assessment beginning on the 1st January, 2007, section 2 (“Interpretation”) (1) of the Income Tax Act [Chapter 23:06] is amended—
(a)by the repeal of the definition of “assessment” and the substitution of—
““assessment” means—
(a)the determination of taxable income and of the credits to which a person is entitled in terms of the charging Act; or
(b)the determination of an assessed loss ranking for deduction;
and includes a self-assessment in terms of section 37A;";
(b)by the insertion of the following definitions—
““return” includes a self-assessment return;
“self-assessment return” means a return rendered in terms of section 37A;”.
10Amendment of section 7 of Cap. 23:06
With effect from the year of assessment beginning on the 1st January, 2007, section 7 (“Calculation of income tax”) of the Income Tax Act [Chapter 23:06] is amended by the insertion of the following subsection, the existing section becoming subsection (1)—
“(2)The tax payable in respect of a self-assessment return shall be calculated in accordance with subsection (1) in respect of each year of assessment during which a taxpayer carried on a trade and is required to submit a self-assessment return in terms of section 37A.”.
11Amendment of section 8 of Cap. 23:06
Section 8 (“Interpretation of terms relating to income tax”)(1) of the Income Tax Act [Chapter 23:06] is amended in the definition of “gross income” with effect from the year of assessment beginning on the 1st January, 2007, in paragraph (f) II—
(a)in proviso (ix) by the deletion of “in respect of the year of assessment beginning on the 1st January, 2006, and any subsequent year of assessment,” and the substitution of “in respect of the year of assessment beginning on the 1st January, 2007”;
(b)by the insertion after proviso (x) of the following proviso—
“(xi)in the case of a motor vehicle, in respect of the year of assessment beginning on the 1st January, 2007, and any subsequent year of assessment, the cost to the employer shall be deemed to be the following
(a)one hundred thousand dollars, in the case of a motor vehicle whose engine capacity does not exceed one thousand five hundred cubic centimetres;
(b)one hundred and sixty thousand dollars, in the case of a motor vehicle whose capacity exceeds one thousand five hundred cubic centimetres but does not exceed two thousand cubic centimetres;
(c)two hundred thousand dollars, in the case of a motor vehicle whose capacity exceeds two thousand cubic centimetres but does not exceed three thousand cubic centimetres;
(d)two hundred and sixty thousand dollars, in the case of a motor vehicle whose capacity exceeds three thousand cubic centimetres;
and such deemed cost shall be reduced proportionally where the period of use of the motor vehicle is less than the year of assessment;”.
12Amendment of section 15 of Cap. 23:06
With effect from the year of assessment beginning on the 1st January, 2007, section 15 (“Deductions allowed in determination of taxable income”) of the Income Tax Act [Chapter 23:06] is amended in subsection (2)—
(a)in paragraph (r1) by the deletion from the proviso of “five hundred thousand dollars” and the substitution of “twenty-five million dollars”;
(b)in paragraph (r2) by the deletion from the proviso of “five hundred thousand dollars” and the substitution of “twenty-five million dollars”;
(c)in paragraph (r3) by the deletion from the proviso of “five hundred thousand dollars” and the substitution of “twenty-five million dollars”;
(d)in paragraph (w) by the deletion of “ten thousand dollars” and the substitution of “one million dollars”.
13New section inserted in Cap. 23:06
With effect from the year of assessment beginning on the 1st January, 2007, Part IV of the Income Tax Act [Chapter23:06] is amended by the insertion after section 36I of the following section–
"36JTax on non-executive directors' fees
There shall be charged, levied and collected throughout Zimbabwe for the benefit of the Consolidated Revenue Fund a tax on non-executive directors' fees in accordance with the Thirty-Third Schedule at the rate fixed from time to time in the charging Act.".
14Amendment of section 37 of Cap. 23:06
With effect from the 1st January, 2007, section 37 (“Notice by Commissioner requiring returns for assessment under this Act and manner of furnishing returns and interim returns”) (1) the Income Tax Act [Chapter 23:06] is amended by the deletion of “The Commissioner” and the substitution of “Subject to section 37A, the Commissioner”.
15New sections inserted in Cap. 23:06
With effect from the 1st January, 2007, the Income Tax Act [Chapter 23:06] is amended by the insertion of the following section after section 37 of the following sections—
“37ASelf-assessment
(1)Every taxpayer specified in a notice published by the Commissioner-General as a taxpayer or member of a class of taxpayers to whom this section is to apply for any year of assessment (hereafter in this section called a “specified taxpayer”) shall, not later than four months after the end of the tax year—
(a)furnish the Commissioner-General with a self assessment return in the prescribed form reflecting such information as may be required for the calculation of tax payable in respect of that year in terms of section 7(2); and
(b)calculate the amounts of such tax in accordance with section 7(2) and pay the tax payable to the Commissioner-General or calculate the amount of any refund due to the taxpayer.
(2)Every specified taxpayer shall, within the period allowed in subsection (1), furnish to the Commissioner-General the return referred to in that subsection in respect of each year of assessment, whether or not tax is payable or a refund is due in respect of such year of assessment.
(3)The Commissioner-General may require any taxpayer by notice in writing to render an interim self assessment return for any period he or she may designate in such notice.
(4)The Commissioner-General may, having regard to the circumstances of any case but subject to section 71, extend the period within which such return is to be furnished or such tax is to be paid.
(5)Subject to subsection (6), a self-assessment return of income shall be signed by the specified taxpayer and include a declaration that the return is complete and accurate. Any person signing any such return shall be deemed for all purposes in connection with this Act to be cognisant of all statements made therein.
(6)A self-assessment return made or purporting to be made or signed by or on behalf of any person for the purposes of this Act shall be deemed to be duly made and signed by the person affected, unless such person proves that such return was not made or signed by him or her or on his or her behalf.
(7)If any specified taxpayer fails or is unable to make a self assessment return, the Commissioner-General may appoint a person to make a return on behalf of such taxpayer, and the return made by the person so appointed shall be, for all the purposes of this Act, treated as the return of the specified taxpayer.
(8)Notwithstanding any other provision of this section, unless he or she is specifically called upon by the Commissioner-General to do so, no return need be made by a specified taxpayer whose taxable income consists solely of remuneration from which employees’ tax has been deducted by an employer in accordance with a directive issued in terms of paragraph 20A of the Thirteenth Schedule.
(9)Where a specified taxpayer is legally incapacitated, the taxpayer’s self-assessment return of income, and a declaration as to its completeness and accuracy, shall be signed by the taxpayer’s legal representative.
(10)Where a specified taxpayer has furnished a self-assessment return accompanied by the relevant documents for a year of assessment, the taxpayer is deemed to have made an assessment of his or her taxable income and the tax payable on that taxable income for that year, being those respective amounts shown in the return.
(11)Where a specified taxpayer has furnished a return in terms of subsection (1), the taxpayer’s return of income is treated as an assessment served on the taxpayer by the Commissioner-General on the due date for the furnishing of the return or on the actual date of furnishing the return, whichever is the later.
(12)Notwithstanding subsection (1), the Commissioner-General may make an assessment under section 46 and 47 on a specified taxpayer in any case in which the Commissioner-General considers necessary.
(13)Where the Commissioner-General raises an assessment in terms of subsection (12), the Commissioner-General shall include with the assessment a statement of reasons as to why the Commissioner-General considered it necessary to make such an assessment.
37BAdvance tax rulings
The Commissioner-General may, in accordance with the Thirty-Fourth Schedule, make an advance tax ruling on any provision of this Act, whether on his or her own initiative or on application by any person interested in a transaction that is or may be liable to tax.”.
16Amendment of section 64 of Cap. 23:06
Section 64 ("Special Court for Income Tax Appeals and proceedings on appeal") of the Income Tax Act [Chapter 23:06] is amended by the repeal of subsection (7) and the substitution of—
“(7)The Registrar of the High Court shall be the Registrar of the Special Court and shall ensure the proper functioning of the court.”.
17Amendment of section 72 of Cap. 23:06
With effect from the year of assessment beginning on the 1st January, 2007, section 72 (“Payment of provisional tax”) of the Income Tax Act [Chapter 23:06] is amended by the repeal of subsection (7) and the substitution of
“(7)Subject to this section, the instalments of provisional tax payable in terms of subsection (2) shall be paid as follows
(a)the first quarterly instalment, of ten per centum of the provisional tax payable, shall be paid on or before the 25th March in relevant year of assessment; and
(b)the second quarterly instalment, of twenty-five per centum of the provisional tax payable, shall be paid on or before the 25th June in the relevant year of assessment; and
(c)the third quarterly instalment, of thirty per centum of the provisional tax payable shall be paid on or before the 25th September in the relevant year of assessment; and
(d)the fourth quarterly instalment, of thirty-five per centum of the provisional tax payable, shall be paid on or before the 20th December in the relevant year of assessment: